Towns incurred P391.67M in un-liquidated fund transfers

By: Gerome Dalipe

VARIOUS municipalities in Iloilo have yet to settle their cash advances and fund transfers used to finance their development programs amounting to P391.67 million, state auditors found.

Worse, the Provincial Government released additional fund transfers to some municipalities despite having un-liquidated cash advances, the Commission on Audit (COA) said in their 2018 annual report.

The long-overdue of unsettled advances and fund transfer was due to Capitol’s failure to conduct regular monitoring and analysis of the fund transfers, the auditors said.

It also violated COA Circular 2016-005, which provides the rules and regulations on the granting, utilization and liquidation of funds transfers to different municipalities for their priority projects.

“Consequently, additional transfers were made to those that have not liquidated within the prescribed period and with no demand issued to liquidate long overdue transfers,” read the COA report.

The Provincial Government transferred funds to various municipalities and even barangays to “accelerate” the implementation of various development projects.

Each transfer was covered by a memorandum of agreement, which provided for the responsibilities of the parties and the terms and conditions of implementation.

Every local government unit is tasked to implement the project within six months from the signing of the agreement.

The Provincial Government, on the other hand, requires the recipient government unit to submit the fund utilization report and report of disbursements upon its program completion.

Pursuant to Sec. 6.1 of COA Circular 2016-005, all government entities are mandated to conduct regular monitoring and analysis of receivable accounts.

This is to ensure that the funds are collected when these become due and demandable and that cash advances and fund transfers are liquidated within the prescribed period depending upon their nature and purpose.

But the auditors said the liquidation for fund transfers from various towns were not properly monitored and analyzed.

Additional fund transfers amounting to P273.89-million were granted to various towns despite the fact that they were unable to submit their liquidation reports for previous transfers.

For the fiscal year, 2018, only P90,844,330.42 liquidations were credited, the auditors discovered. Such increased the un-liquidated fund transfers from P208,621,609.10 in 2017 to P391,671,879.08 in 2018.

During the conference, the provincial accountant said that monitoring and analysis of fund transfers to other towns are the responsibilities of the Provincial Planning and Development Office and the Office of the Governor.

Likewise, the accountant said that schedules of outstanding fund transfers were regularly furnished to the Office of the Governor for their reference.

The provincial accountant admitted that there were fund transfers that were long overdue for liquidation, but with no demand letters issued.

He said that some fund transfers for the implementation of hard infrastructure projects may not be feasibly made within the six months period, pursuant to the agreement.

The provincial accountant also said that additional fund transfers may be granted provided that the purpose was different from the previous one.

In the report, the auditors urged the governor to direct the provincial accountant to coordinate with the development and planning office in monitoring the status of the fund transfers.

The auditors also asked the governor to stop the release of fund transfers to other municipalities with un-liquidated fund transfers.

The Capitol officials should also review the draft controls, policies, and guidelines submitted by the Internal Audit Services to correct, modify, or revise the fund transfers.